This post was most recently updated on October 24th, 2023

Anyone who works in digital advertising – from advertisers to agencies to developers and publishers – has certainly heard of a walled garden.

Although the term gets thrown around in AdTech quite often, its roots reach far beyond programmatic advertising.

The internet is often perceived as a place where everyone is equal and there are no restrictions – at least, that’s how most of us envision it.

An insider look at AdTech, however, will quickly dismiss those thoughts; some of the most successful publishers out there are the ones that grew by properly capitalizing on the concept of a walled garden.

In this blog post, we talk about what walled gardens are perceived to be and how they will be impacting publishers in the long haul.

What are walled gardens?

A walled garden is a system where tech platforms have total control over your content, media, and applications.

With this control, third-party applications and content, such as your audience data, are restricted from being accessed and monetized.

As a publisher who is making use of walled gardens, you get massive audience reach, monetization benefits, and traffic boosting opportunities.

A majority of major walled gardens are Facebook, Twitter, Snapchat who built their initial ad technology offering in-house to meet their own needs.

Their approach combines their services as a publisher with those of an ad-tech provider.

Unlike the Open Internet, which is typically where publishers have control over their media & their data being added, removed, or modified.

Within digital publishing, providers like GAFA- Google, Apple, Facebook, Amazon are the main walled gardens while providers like AppNexus, Index Exchange, and TripleLift come in the Open Internet category.

Let’s dig deeper into how walled gardens operate in the AdTech biz, its pros and cons, and how impactful it is towards publishers.

The Good, The Bad & The Fake

Walled gardens lead to monopolies that burn the competition and generate an unstable power dynamic, though they can be strangely effective tools for publishers as well.

Here’s the good, the bad, and the ugly.

The Good

• User Security: Companies such as Apple pride themselves on their walled gardens. In certain cases, advertisers are even required to obtain user consent to make certain tracking options available to them. All data is encoded in such a way that none of it can be shared with third parties. Within a closed platform, the service provider controls the data and can put in place effective security measures to protect it.

• Cross-Device Targeting: Most users use their mobile phones, tablets, or laptops to do a quick Google search or quick Amazon Add to Cart. All these actions are not happening on a single device (Duhh!). In turn, these platforms have access to cross-device data that can be shared with advertisers, as well as reach into the lives of users regardless of the devices they are streaming on.

• Rich User Data: The GAFA walled gardens have abundant user data that can be leveraged to further build targeted campaigns that not only lead to profitable yield for both the advertisers and publishers but potentially offer users more of what they actually came for.

The Bad and The Fake

• Data usage is confined to the platform, restricted activation elsewhere, resulting in data silos

• Fragmented reporting and restricted exports to other systems

• Different solutions demand to cover additional channels, leading to time & cost-intensive vendor governance

• Closed ecosystem: Burdening integrations to other solutions in the AdTech industry

You can try building your own walled garden, but in the AdTech world specifically, taking the path of least resistance means going where the people are, and there are billions already in the walled gardens of GAFA

In a nutshell, the GAFA walled gardens are not your competition but these ecosystems can actually take your ad inventory game to another level if you make use of them properly.

Walled Gardens vs Independent Ad-Tech Companies

 

Google, Facebook, and Amazon may account for more than half of all revenue generated from digital advertising, but they’re not the only players.

Independent AdTech companies are the entities outside the walled gardens.

These include:

• Demand-side platforms (DSPs)
• Supply-side platforms (SSPs)
• Ad networks
• Ad exchanges
• Ad servers
• Consent management platforms (CMPs)
• Data management platforms (DMPs)
• Identity resolution vendors
• Ad quality vendorsLiveRamp, Magnite, MediaMath, The Trade Desk, OpenX, etc are a few examples of independent AdTech companies.

Although independent ad tech companies lack the scale and data of the Triopoly, they offer brands, advertisers, agencies, and publishers with an array of benefits:

• Better support: Ad tech companies, which are mainly oriented towards growth and retention, tend to provide direct access to help and tech support, assigning committed account managers to most clients. It’s difficult to get instant one-on-one support from GAFA unless you’re a prioritized client.
• Customization: You can easily work with independent ad technology vendors to develop custom solutions, or you can build your own using their open application programming interfaces (APIs). You get the same solution with walled gardens with the minimal scope of customization regardless of size.
• Data Ownership: For header bidding, most independent ad tech vendors allow their clients to upload their own data sets for targeting, and in most cases, publishers have access to log-level data. On the other hand, walled gardens are more restrictive in terms of the data that can be ingested into their platforms or gleaned from them.
• Transparency: With independent AdTech companies, you get access to reporting data, metrics, and attribution more freely than walled gardens which pose as black boxes. Independent ad tech companies provide access to measurement, attribution, and reporting data more freely than walled gardens, which tend to operate as black boxes. Furthermore, they often allow 3rd-party companies to verify, measure and integrate ad campaigns and revenue performance on a regular basis.

How do walled gardens impact publishers?

Publishers are in a solid position to develop their own walled gardens versions since they have all the data and user logs stacked up. (User data is collected each time a visitor logs on to view your blog)

Increasingly scarce consumer data could result in price increases as well.

Publishers are therefore seeking to expand their addressable audiences through legit registration strategies.

Google and Facebook have an abundance of data about consumer purchases, but they are unable to provide value in the form of rich content like publishers do.

This means that these platforms are unable to collect user metrics about how people engage with content.

Media agencies also see this as a gold mine in tapping into the publisher-backed walled gardens.

The media agencies see their companies serving as navigators in this complicated ecosystem as investments are a must to facilitate the optimization of data distributed among the many walled gardens. Small and medium walled gardens are included in these cases too.

In terms of improving the yield for every impression, competition on the demand side directly benefits publishers.

This is the main reason why PubGuru header bidding has been gaining widespread adoption, which also serves as a solid illustration of how walled gardens impact publishers.

Prior to header bidding, Google handed the ad exchange (Google AdX) a “last-look” advantage.

As a result, AdX had the ability to review all competing bids before an impression was served and then outbid them. Meanwhile, the less popular exchanges didn’t get the opportunity to do the same.

Through header bidding, all exchanges could simultaneously bid on every single impression, resulting in a higher yield for publishers.

After header bidding was already mainstream, Google revoked AdX’s “last-look” advantage.

Publishers with large first-party datasets often create their own walled gardens, offering certain users ad-supported content while other users can subscribe.

A publisher’s best defense against walled gardens is to build a better understanding of their own audience, work with demand-agnostic ad tech partners, and package their ad inventory or ad space in ways that advertisers find appealing.

Key Takeaways

• Walled gardens in AdTech refer to Google, Facebook, Amazon, and Apple, which are often written as GAFA or FAGA.
• Google and Facebook have been named “the duopoly” with their large ad spend market shares.
• Due to Amazon’s huge stack of purchase & consumer data, it could enter the ranks of Google plus Facebook and form an oligopoly.
• The other companies outside of the walled gardens have been termed independent AdTech.

Wrap Up

So, what is our ultimate advice for publishers? Pick an open, well-integrated platform, which allows seamless access to leading 3rd party solutions.

With MonetizeMore, commitment to openness stretches beyond our products. We dedicate significant time and resources to ensure that integration partners are accessible through us.

This open approach makes facilitating these integrations a core part of our offering and ensures that publishers have the upper hand in any situation.

Open up and showcase your ad inventory!

With MonetizeMore you get to highlight the unique benefits of your inventory and access the widest possible demand. Get started today!